Does it Help Your Credit Score to Have Utility Bills in Your Name?

Utilities require monthly payments, much like loans, but it is unlikely utility payments will help you build credit. On the contrary, for most people, utilities on a credit report represent a negative item. Putting utilities in your name, however, could help you prove your integrity and responsibility to some lenders.

Identification

In most states, privacy laws prevent utility companies from reporting payment information to the credit bureaus, and that includes positive payment history, according to Payments Source. In the few states that do allow reporting on utility payments, having them in your name would boost your score if you pay your bill on time. Even in the states that permit utility companies to report payment information, many utility companies do not report it, because it is an added expense and utility companies are not providers of credit.

Considerations

Putting utility bills in your name risks the possibility of the company sending the bill to a debt collector if you miss a few payments. If it goes to a collections agency, the credit bureaus probably will be notified. A debt collection on your credit report does considerable harm to your credit score. It stays on your report for seven years, but does the most damage in the first two years.

Alternative Scoring Agencies

You can report utility payments to alternative credit scoring agencies yourself. Alternative scoring agencies are not widely accepted in the lending industry in 2010, but some of the major credit bureaus incorporate data from these companies into consumer credit reports. Unlike a normal credit report, in which the lender pays to report data, the consumer pays a monthly charge to have an agency report his utility payments.

Tip

Keep past utility bills and canceled checks after making payments, because you can use them to prove your creditworthiness. If you provide canceled utility checks, the lender will consider them in his assessment. Alternatively, you can obtain a secured credit card -- which is backed by a deposit and reported to the credit bureaus -- and pay your utility bill with that. The use of a secured credit card may boost your credit score over time.